The UK would like to see a legally binding "Treaty framework" on measures to combat global climate change "covering everyone now", but hopes it will be complete by 2015, Chris Huhne said yesterday.

However, at the same time, carbon prices reached a new all-time low in Europe, raising fresh doubts over the ability of the markets to finance the technical solutions needed to fight climate chaos.

Speaking to Imperial College's Grantham Institute, with the COP17 United Nations Climate Change Conference in Durban just a few days away, the Energy Secretary called climate change "the biggest market failure the world has ever seen".

He said that at Durban, "we need major economies to commit to a global legally binding framework – building on what Kyoto started, but going much broader.

"And we need negotiations on this new agreement to complete as soon as possible, and by 2015 at the latest."

Expressing hope that this can be achieved despite major differences among nations, he emphasised that the UK has always backed a legally binding agreement under the United Nations, because "no pressing international problem has been solved without one".

He cited a recent survey which found that 83% of business leaders want such an agreement.

Mr. Huhne said he remains hopeful that a deal can be reached because "compared to world trade agreements, or non-proliferation talks, we are actually making good progress".

A successful deal, he said, would "move to a system that reflects the genuine diversity of responsibility and capacity", which recognises current sticking points such as mis-definitions of what makes a ″developing″ or ″developed″ nation by labelling richer Singapore as "developing" yet poorer Bulgaria "developed".

He said that the UK would also push for Europe to agree to a 30% cut in emissions by 2020 "early next year".

"We already have the solutions" - UNEP

On Wednesday, the United Nations Environment Program (UNEP) warned that greenhouse gas emissions in 2020 could rise more than had been forecasted, to between 6 billion and 11 billion tons above what is needed to limit global warming to within the 2 degrees Celsius increase that is considered ″safe″.

"To stay within the 2 degree limit, global emissions will have to peak soon (and) total greenhouse gas emissions in 2050 must be about 46% lower than their 1990 level, or about 53% lower than their 2005 level," its report, Bridging the Gap says.

It emphasises that renewable energy and energy efficiency technologies are the way out of the problem. "The world already has the solutions to avert damaging climate change" it says.

Half of these measures, that are described in the report, "can deliver net cost savings over their lifetime; for example, from reduced fuel consumption or the use of recovered gas".

It continues: "Other measures to cut short-lived climate forcers would incur higher costs over a short-term basis, but can achieve major savings in other areas, such as the health improvements and reduced damage to ecosystems and crops associated with cleaner air".

Carbon price fall

But the prospect of delivering these, at least in Europe, took a blow yesterday when the value of carbon permits fell to their lowest level since 2007, partly as a function of reduced industrial production due to the Eurozone's sovereign-debt crisis.

The December 2011 energy contract fell 13.8% in two days, the biggest price decline in five months, on a fall in industrial orders of 6.4% in September, itself the biggest drop in almost three years.

This has reduced energy demand from Europe's 11,000 factories and their supply by fossil-fuel-burning power stations, which have to buy carbon allowances and credits in order to meet demand.

This has added to an existing oversupply of carbon permits in Europe thereby reducing the price further. The reduced demand for energy is also suppressing its projected future price.

In turn, this is affecting the business plans of renewable energy developers like SSE, who hope to double their renewable electricity capacity by 2015 by spending ￡1bn on new wind farms and hydro-electric plants.

The worry is that this may make companies and utilities continue to favour cheaper, more-polluting forms of energy, such as coal and gas.

The market is bracing itself for further falls in the carbon price as 300 million further carbon permits from the EU's post-2012 new entrants' reserve will be put on sale at the end of this month.

Speculators are wondering just how low the price can go.

UK measures

In more positive news, earlier yesterday, DECC had indicated that Tuesday's Autumn Budget Statement by the Chancellor George Osborne, will contain £200m of new and additional government funding to provide a ″special time-limited ‘introductory’ offer″ to increase the early take-up of the Green Deal energy efficiency scheme.

Furthermore, energy minister Charles Hendry issued a statement at the EU Energy Council, along with other coastal European countries, in support of the potential of the marine energy industry and asking for European-level leadership to maintain the region's competitive advantage.

Amidst this, back at Imperial College yesterday, Huhne tried to remain upbeat. He reminded delegates of the financial measures already allocated by the UK to developing countries to tackle climate change:

giving more than half of its Fast Start finance, and much of its ￡1.5bn pledge

budgeting for climate finance beyond the Fast Start period

backing the Green Climate Fund

setting up the International Climate Fund, which will account for 7.5% of UK Official Development Assistance (ODA) by the April 2015.

At the end of his speech, Huhne quoted a South African tribal saying: "The elephant’s trunk doesn’t weigh it down".

Translated, he said this means: "We must all carry our own burden".

He said this referred to all nations as they approach the Durban negotiating table.

Or perhaps he was referring to himself. The energy secretary certainly has his work cut out for him.